Taxpayer stimulus waster A123 Systems has not only declared financial bankruptcy – its executives also seem to be driving toward moral bankruptcy as well.
CEO David Vieau and his lieutenants, after receiving well over $279 million in Recovery Act funds and at least $135 million from Michigan taxpayers, have run the company into the ground. Yet they have asked a bankruptcy court judge for his blessing to receive up to $4.2 million in executive and retention bonuses to see through the company’s takeover, likely by Johnson Controls.
NLPC detailed the self-serving nature of A123’s leadership in February. At the time A123 had laid off 125 employees in November at its two plants in Livonia and Romulus, Mich. Company officials said diminished production by A123’s top customer, Fisker Automotive, led to the cutbacks. A123 had expected to deliver batteries for 7,000 plug-in hybrid Fisker Karma models, but faulty wire harnesses … Read More ➡
As Bloomberg reported today, stimulus-funded electric vehicle battery maker A123 Systems filed bankruptcy in federal court after failing to make a debt payment that was due. Milwaukee Business Times has reported that Johnson Controls will purchase the “automotive business assets” of A123 for $125 million, and that A123 will receive from Johnson $72.5 million in “debtor in possession” financing to continue operating during the sale process.
Regular readers won’t be surprised, as the company’s gradual sink to its current depths – despite receiving hundreds of millions of dollars from taxpayers – has been covered by NLPC since late last year. A review:
December 2011: A123 announced it would lay off 125 employees at its two refurbished plants in Michigan, attributing the cutbacks to diminished production by its top customer, Fisker Automotive. NLPC documented how A123 was also an investor in Fisker, which has had its own difficulties … Read More ➡
As stimulus-funded ($249 million-plus) A123 Systems sees its stock price drop back near its all-time low and waits for a Chinese rescue, two Republican senators want answers about whether taxpayer dollars are again funding jobs and technology that will be transferred overseas.
Iowa Sen. Charles Grassley, the ranking minority member on the Judiciary Committee, and South Dakota Sen. John Thune queried A123 CEO David Vieau about the logistics of a proposed sale to China-based Wanxiang Group Corp. In August, just as the company reported another $82.9 million in second-quarter losses, a deal was announced in which Wanxiang would deliver $75 million in initial loans and then would buy $200 million of senior secured convertible notes, followed by a possible $175 million “through the exercise of warrants it would receive in connection with the bridge loan and convertible notes.” If fully consummated, the end result could mean A123 ends … Read More ➡
As the now-bankrupt stimulus loan recipient Abound Solar filed for Chapter 7 (liquidation) bankruptcy in early July thanks largely to its defective modules, the Department of Energy still praised the company’s work as “innovative” and cost competitive, all while it blamed Abound’s failure on China for dumping underpriced panels on the market.
And now, despite the fact that Abound no longer exists, DOE is still withholding public information about the company because it claims it would harm the inactive business’s competitive edge by disclosing trade secrets.
The Daily Caller reported last week that the company sold defective or underperforming products, and cited inside sources at the company who claimed officials knew their panels were faulty before they received taxpayer dollars. Abound received a reported $70 million out of a total $400 million stimulus loan guarantee – financing that was closed on in December 2010, two months after Abound knew … Read More ➡
A former student at the University of North Carolina has come forward publicly to call attention to the disturbing experiments the Environmental Protection Agency has conducted – and is likely still performing – at its Human Studies Facility in Chapel Hill, N.C.
Meanwhile Sen. James Inhofe (pictured), ranking minority member on the Environment and Public Works Committee, has requested that Chairman Barbara Boxer conduct a hearing about EPA’s activities during the current lame-duck session.
The student, Landon Huffman, found out about the EPA program through an advertisement in The Daily Tar Heel, the university’s newspaper. The experiments exposed subjects to fine particulate matter (called “PM2.5”) at extremely elevated levels for up to two hours at a time. Researchers – at the direction of medical doctors – sought test subjects with health problems such as heart conditions, obesity or breathing difficulties. Huffman is an asthmatic and is a member-plaintiff in … Read More ➡
It’s been six months since the taxpayer-subsidized ($193 million) Fisker Karma broke down at the test facilities of Consumer Reports before the publication could even take it for a review spin, but now the researchers have finally been able to put the luxury electric car through its paces and their assessment is complete.
Why did it take so long for the car loved by Leonardo DiCaprio, Justin Bieber and Al Gore to get the full evaluation? Consumer Reports explains:
“With the Karma, much attention has been paid to our unfortunately routine problems, including an early failure on our track that left the car immobile and led to the battery being replaced, frequent instrument, window and radio glitches, and recurring warning lights. So far our Karma has made multiple trips back to the dealer (who, by the way, has provided excellent service, flat-bedding the car to and … Read More ➡
After accumulating evidence via the Freedom of Information Act that showed the Environmental Protection Agency conducted disturbing experiments that exposed humans to inhalable particulates the agency has said are deadly, sound science advocate Steven Milloy has sued the federal government.
The trials, which were carried out at EPA’s Human Studies Facility at the University of North Carolina in Chapel Hill, exposed subjects to fine particulate matter (called “PM2.5”) at extremely elevated levels for up to two hours at a time. EPA’s Web site on particulate matter and its 2009 “Summary of PM2.5 Risk Estimates,” stated, “an examination of cause-specific risk estimates found that PM2.5 risk estimates for cardiovascular deaths are similar to those for all-cause deaths….” Also, in July 2011 EPA stated in the Federal Register announcement of its Cross-State Air Pollution Rule that “a recent EPA analysis estimated that 2005 levels of PM2.5 and ozone were responsible for … Read More ➡
The failing British electric vehicle company that pretended to become an American one in order to save its U.K. investors has scrapped its planned initial public offering that it hoped would save it in Kansas City.
Smith Electric Vehicles, recipient of $32 million in taxpayer stimulus, had reportedly fantasized it would raise $76 million (down from $125 million) via an IPO by selling roughly 4 ½ million shares at $16 to $18 each. CEO Bryan Hansel bowed to reality Thursday night and rescinded those plans.
“We received significant interest from potential investors,” he said in a statement. “However, we were unable to complete a transaction at a valuation or size that would be in the best interests of our company and its existing shareholders.”
Hansel said that the company will pursue “private financing opportunities” instead, which is also likely a fantasy – at least one that will enable … Read More ➡
It’s the battery.
Contrary to the excuses that Nissan has supplied about the loss of capacity for owners of the all-electric Leaf in the desert Southwest – especially super-hot Phoenix – a tightly-controlled test of a dozen of the vehicles showed that all of them experienced reduced range. Even a month-old Leaf could not recharge to 100 percent.
GreenCarReports.com revealed the dismal development this week. That the power reduction came so rapidly and so quickly debunked the claims of Nissan executives Carla Bailo and Andy Palmer, who suggested the problems could lie either with owners who were charging their vehicles improperly or that the power gauges were providing faulty readings.
The Arizona tests weren’t run by a bunch of skeptics out to prove what a failure President Obama’s electric car stimulus initiative is – even though it is. Leaf owners, led by EV advocate Tony Williams, ran the tests.… Read More ➡
The venture capital redistributionist game that surrounds President Obama’s green energy stimulus doesn’t necessarily require the actual delivery of taxpayer cash to crony corporations. Sometimes the malfeasance appears simply based upon the false promise of government “investment.”
Such was the case with the co-founders of Chicago-based Advanced Equities, Inc., who just received a severe reprimand (including big fines) from the Securities and Exchange Commission for dispensing false information to potential funders in attempts to gain private equity investment. In two separate offerings in 2009 and 2010, co-founder Dwight Badger (who left the firm in June) was accused of telling investors that the financial condition and business orders for Advanced Equities’ client – revealed to be fuel cell manufacturer Bloom Energy by Crain’s Chicago Business – far exceeded reality. Badger’s partner, co-founder and Board Chairman Keith Daubenspeck, was fined for “failing to reasonably supervise Badger.”
Advanced Equities also was the … Read More ➡